A method is presented for generating test statistics that share the same first order asymptotic optimality properties of the classical statistics. Generalizing J. Neyman's work (1959), t he linearized classical statistic tests restrictions in implicit func tion form using a parameter estimator that is consistent and symptoti cally normally distributed under the alternative hypothesis. By judic ious choice of estimator and form of restrictions at which to evalua te the statistic, a class of asymptotically optimal statistics is obt ained, among which are numbered some familiar classical statistics. A n application is presented for testing common factor restrictions in a single equation dynamic regression model with moving average distu rbances.

A symmetric allocation in a continuum is "multilaterally incentive compatible" if no finite coalition of privately informed agents can manipulate it by combining deception with hidden trades of exchangeable goods. Sufficient conditions for mutilateral compatibility are that all agents face the same linear prices for exchangeable goods and that indistinguishable agents face identical budget sets. The same conditions are necessary under assumptions that extend those under which the second efficiency theorem of welfare economics holds in a continuum economy. Markets for exchangeable goods emerge as binding constraints on the set of Pareto efficient allocations with private information.

Amit Bhaduri, Donald J. Harris; The Complex Dynamics of the Simple Ricardian System*, The Quarterly Journal of Economics, Volume 102, Issue 4, 1 November 1

We thank Lincoln Anderson, Orley Ashenfelter, Costas Azariadis, David Card, William A. Darity, Jr., Belton Fleisher, Richard Froyen, James J. Heckman, Solomon Polachek, Lawrence H. Summers, and two anonymous referees. Particular thanks go to Didi Dunphy for drafting the figures and to the University of North Carolina, College of Arts and Sciences, Endowment for Scholarly Publications for providingfinancial support. Sarah Mason did her usualfine job of typing, Karen Smith and Jonathan Veum provided valuable computing assistance, and Cynthia McCarty cheerfully checked citations for completeness and correctness. Preliminary versions of this paper have been presented at the 1982 Annual Meetings of the Econometric Society, the Fifth World Congress of the Econometric Society, 1985, and the 1986 Annual Meetings of the Eastern Economic Association.

Those schooled in the shifting curves of static and steady-state macro models may not fully appreciate the dynamic nature of fiscal policy. Simple blackboard models can convey neither the timing nor the magnitude of responses to shortand intermediate-term fiscal policies, nor can they isolate the impact of fiscal policies on transitional generations. There is also a range of issues, such as deficit finance and the relative efficiency of alternative tax structures, that cannot be properly addressed without solving for the economy's transition path. Recent experience has provided several experiments in dynamic fiscal policy, including the accumulation of large amounts of official government debt, expected future changes in the level of social security benefits, shifts in the tax structure, and increases and then reductions in investment incentives. Each of these policies has important transitional as well as long-term effects. The analysis of these effects is possible using a dynamic general equilibrium numerical simulation model.

Auditing, Audit delay, Timeliness

William J. Moore, John Raisian, Union-Nonunion Wage Differentials in the Public Administration, Educational, and Private Sectors: 1970-1983, The Review of Economics and Statistics, Vol. 69, No. 4 (Nov., 1987), pp. 608-616